IT Association Hails US Government's Stance On Internet Tax Moratorium, R&D Tax Credit

by Mike Godfrey, Tax-news.com, Washington

25 April 2001

We reported at the beginning of the week that US Vice President Dick Cheney had expressed his desire for a permanent ban on Internet access taxes to instituted. The October deadline for expiry of the current Internet tax moratorium is growing closer and campaigners on both sides are naturally becoming increasingly vocal on the subject. The Information Technology Association of America (ITAA) this week praised Mr Cheney's stance on Internet taxation, which he unveiled in a speech to the Northern Virginia Technology Council.

The ITAA consists of over 500 direct and 26,000 affiliate corporate members throughout the US and a global network of 41 countries' IT associations. It is concerned with IT industry issues such as information security, taxes and finance policy, digital intellectual property protection, telecommunications competition, workforce and education, immigration, online privacy and consumer protection, government IT procurement, human resources and e-commerce policy.

ITAA President Harris N Miller remarked this week of Mr Cheney's comments: 'We are pleased that the Vice President shares our view that an extended moratorium is the best way to assure non-discriminatory tax treatment for remote commerce. Mr Cheney understands as we do that higher costs and greater confusion will be the 'net' results of hasty schemes by states and localities to tax Internet sales. We are also pleased to note his stand against discriminatory Internet access taxes.'

The ITAA has also praised the Bush administration for reaffirming its pledge to make the Research and Development tax credit permanent in its 2002 budget proposal. The ITAA has long been a proponent of making the R&D tax credit permanent; currently the credit expires in 2004. Mr Miller said in a statement: 'A permanent research and development tax credit is key to long term planning and budgeting for every information technology business. A permanent R&D credit will enable companies to continue their rigorous programs of experimentation, and allow the IT industry to continue innovating at warp speed. ITAA applauds the Bush administration proposal to make the credit permanent, and we will work with the House and Senate to voice our support for this leading policy priority of the high tech industry.'

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